RWE, Iberdrola, GDF Suez exit Romania nuclear plan

Friday, January 21, 2011

PARIS/FRANKFURT, Jan 20 (Reuters) - Power groups GDF Suez, Iberdrola and RWE said on Thursday they were pulling out of a multi-billion dollar nuclear project in Romania, confirming an earlier report by Reuters.

"Economic and market-related uncertainties surrounding this project, related for the most part to the present financial crisis, are not reconcilable now with the capital requirements of a new nuclear power project," the groups said in a joint statement.

This leaves only two foreign firms in the project, Italy's Enel and a local unit of ArcelorMittal.

An adviser to Romania's economy ministry said the country would now look for new investors, adding he did not expect the project to be much delayed by this.

Romania's state-owned nuclear power group, which already has two 706 megawatt reactors in Cernavoda -- the country's sole nuclear plant which accounts for a fifth of its power output -- had originally planned to build two more with six foreign firms.

But Czech power firm ČEZ left the joint venture last September.

News that three more partners were pulling out of the project -- estimated at roughly 4 billion euros ($5.4 billion) -- means the government, which had hoped to lower its stake, will now have to shoulder a heavier financial burden.

GDF Suez, RWE and Iberdrola started to reconsider their investment decision after the Romanian government hinted that it wanted to trim its stake, one source at one of the companies said.

"With CEZ gone and the government reducing its stake, it meant we were left picking up the tab with an investment far bigger than what was originally envisaged," he said.

Rising oil prices and growing concern over emissions of climate-warming carbon from coal- and gas-fired power plants has sparked renewed interest in nuclear power in Europe.

But a number of central and eastern European states have had to delay their nuclear plans in recent years due to funding shortages and domestic politics.

RWE in 2009 pulled out of the Bulgarian Belene nuclear project, referring to financing uncertainties.

RWE, GDF Suez and Iberdrola said on Thursday they remained committed to the development of nuclear power projects abroad.

GDF Suez Chief Executive Gerard Mestrallet said at a news event in Paris that his group was looking at new nuclear projects in Britain, Italy, Brazil and Chile, and that it was regularly approached by U.S. power groups on the issue.

The French group, which recently took over International Power to form the world's largest gas and power producer, is also looking at Jordan, where French nuclear reactor maker Areva is negotiating deals.